diff --git a/frontend/components/editor/index.tsx b/frontend/components/editor/index.tsx
index 45fb556..59e7a21 100644
--- a/frontend/components/editor/index.tsx
+++ b/frontend/components/editor/index.tsx
@@ -1028,6 +1028,8 @@ export default function CodeEditor({
           setFiles={setFiles}
           addNew={(name, type) => addNew(name, type, setFiles, sandboxData)}
           deletingFolderId={deletingFolderId}
+          toggleAIChat={toggleAIChat}
+          isAIChatOpen={isAIChatOpen}
         />
         {/* Outer ResizablePanelGroup for main layout */}
         <ResizablePanelGroup
diff --git a/frontend/components/editor/sidebar/index.tsx b/frontend/components/editor/sidebar/index.tsx
index 4b72803..c68ec48 100644
--- a/frontend/components/editor/sidebar/index.tsx
+++ b/frontend/components/editor/sidebar/index.tsx
@@ -10,7 +10,7 @@ import New from "./new"
 
 import { Button } from "@/components/ui/button"
 import { Skeleton } from "@/components/ui/skeleton"
-import { sortFileExplorer } from "@/lib/utils"
+import { cn, sortFileExplorer } from "@/lib/utils"
 import {
   dropTargetForElements,
   monitorForElements,
@@ -27,6 +27,8 @@ export default function Sidebar({
   setFiles,
   addNew,
   deletingFolderId,
+  toggleAIChat,
+  isAIChatOpen,
 }: {
   sandboxData: Sandbox
   files: (TFile | TFolder)[]
@@ -43,6 +45,8 @@ export default function Sidebar({
   setFiles: (files: (TFile | TFolder)[]) => void
   addNew: (name: string, type: "file" | "folder") => void
   deletingFolderId: string
+  toggleAIChat: () => void
+  isAIChatOpen: boolean
 }) {
   const ref = useRef(null) // drop target
 
@@ -188,7 +192,7 @@ export default function Sidebar({
           style={{ opacity: 1 }}
         >
           <Sparkles className="h-4 w-4 mr-2 text-indigo-500 opacity-70" />
-          Copilot
+          AI Editor
           <div className="ml-auto">
             <kbd className="pointer-events-none inline-flex h-5 select-none items-center gap-1 rounded border bg-muted px-1.5 font-mono text-[10px] font-medium text-muted-foreground">
               <span className="text-xs">⌘</span>G
@@ -197,12 +201,24 @@ export default function Sidebar({
         </Button>
         <Button
           variant="ghost"
-          className="w-full justify-start text-sm text-muted-foreground font-normal h-8 px-2 mb-2"
-          disabled
-          aria-disabled="true"
+          className={cn(
+            "w-full justify-start text-sm font-normal h-8 px-2 mb-2 border-t",
+            isAIChatOpen 
+              ? "bg-muted-foreground/25 text-foreground" 
+              : "text-muted-foreground"
+          )}
+          onClick={toggleAIChat}
+          aria-disabled={false}
           style={{ opacity: 1 }}
         >
-          <MessageSquareMore className="h-4 w-4 mr-2 text-indigo-500 opacity-70" />
+          <MessageSquareMore 
+            className={cn(
+              "h-4 w-4 mr-2",
+              isAIChatOpen 
+                ? "text-indigo-500" 
+                : "text-indigo-500 opacity-70"
+            )}
+          />
           AI Chat
           <div className="ml-auto">
             <kbd className="pointer-events-none inline-flex h-5 select-none items-center gap-1 rounded border bg-muted px-1.5 font-mono text-[10px] font-medium text-muted-foreground">
diff --git a/frontend/package-lock.json b/frontend/package-lock.json
index 91f14a5..89cd1fa 100644
--- a/frontend/package-lock.json
+++ b/frontend/package-lock.json
@@ -37,6 +37,7 @@
         "@xterm/xterm": "^5.5.0",
         "class-variance-authority": "^0.7.0",
         "clsx": "^2.1.1",
+        "embla-carousel": "^8.3.0",
         "embla-carousel-react": "^8.3.0",
         "embla-carousel-wheel-gestures": "^8.0.1",
         "framer-motion": "^11.2.3",
@@ -3128,12 +3129,14 @@
     "node_modules/embla-carousel": {
       "version": "8.3.0",
       "resolved": "https://registry.npmjs.org/embla-carousel/-/embla-carousel-8.3.0.tgz",
-      "integrity": "sha512-Ve8dhI4w28qBqR8J+aMtv7rLK89r1ZA5HocwFz6uMB/i5EiC7bGI7y+AM80yAVUJw3qqaZYK7clmZMUR8kM3UA=="
+      "integrity": "sha512-Ve8dhI4w28qBqR8J+aMtv7rLK89r1ZA5HocwFz6uMB/i5EiC7bGI7y+AM80yAVUJw3qqaZYK7clmZMUR8kM3UA==",
+      "license": "MIT"
     },
     "node_modules/embla-carousel-react": {
       "version": "8.3.0",
       "resolved": "https://registry.npmjs.org/embla-carousel-react/-/embla-carousel-react-8.3.0.tgz",
       "integrity": "sha512-P1FlinFDcIvggcErRjNuVqnUR8anyo8vLMIH8Rthgofw7Nj8qTguCa2QjFAbzxAUTQTPNNjNL7yt0BGGinVdFw==",
+      "license": "MIT",
       "dependencies": {
         "embla-carousel": "8.3.0",
         "embla-carousel-reactive-utils": "8.3.0"
@@ -3154,6 +3157,7 @@
       "version": "8.0.1",
       "resolved": "https://registry.npmjs.org/embla-carousel-wheel-gestures/-/embla-carousel-wheel-gestures-8.0.1.tgz",
       "integrity": "sha512-LMAnruDqDmsjL6UoQD65aLotpmfO49Fsr3H0bMi7I+BH6jbv9OJiE61kN56daKsVtCQEt0SU1MrJslbhtgF3yQ==",
+      "license": "MIT",
       "dependencies": {
         "wheel-gestures": "^2.2.5"
       },
diff --git a/frontend/package.json b/frontend/package.json
index 633bc81..5deb7c6 100644
--- a/frontend/package.json
+++ b/frontend/package.json
@@ -38,6 +38,7 @@
     "@xterm/xterm": "^5.5.0",
     "class-variance-authority": "^0.7.0",
     "clsx": "^2.1.1",
+    "embla-carousel": "^8.3.0",
     "embla-carousel-react": "^8.3.0",
     "embla-carousel-wheel-gestures": "^8.0.1",
     "framer-motion": "^11.2.3",